UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  May 6, 2020 (May 1, 2020)

 

BLACKROCK CAPITAL INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

40 East 52^nd Street

New York, NY 10022

(Address of principal executive offices)

(212) 810-5800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

 

 

 

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On May 1, 2020, BlackRock Capital Investment Corporation (NASDAQ: BKCC) (the “Company”) entered into a Waiver and Agreement No. 2 to the Second Amended and Restated Senior Secured Revolving Credit Agreement (“Waiver and Agreement”) dated as of March 13, 2013 (the “Revolving Credit Facility”) among the Company, the Lenders from time to time party thereto, Citibank, N.A. as Administrative Agent for the Lenders and Bank of Montreal, Chicago Branch, as Syndication Agent. The Waiver and Agreement supplements and supersedes in its entirety the Waiver and Agreement (“Previous Waiver”) dated as of March 31, 2020 to the Revolving Credit Facility. The Waiver and Agreement (i) waives the requirement for the Company to comply with the covenant set forth in Section 6.07(a) (the “Minimum Shareholders’ Equity covenant”) of the Revolving Credit Facility at all times from March 31, 2020 through August 10, 2020 (the “Waiver Period”); (ii) reduces the minimum asset coverage ratio required to be maintained by the Company set forth in Section 6.07(b) (the “Asset Coverage Ratio”) of the Revolving Credit Facility during the Waiver Period from 2.00 to 1 to 1.50 to 1; (iii) provides that the Company shall not request any borrowing during the Waiver Period if, after giving effect to such borrowing, the aggregate Revolving Credit Exposure (as defined in the Revolving Credit Facility) would exceed $228 million; and (iv) provides that, during the Waiver Period, the Company will not use more than $10 million of the proceeds of loans from new borrowings in the event the aggregate Revolving Credit Exposure exceeds $192 million, to invest in new portfolio companies, subject to certain conditions.

 

As of December 31, 2019 and March 31, 2020, the Company had outstanding approximately $174.4 million and $168.4 million under the Revolving Credit Facility, respectively. As of March 31, 2020, no Default or Event of Default (as defined in the Revolving Credit Facility) has occurred under the Revolving Credit Facility. The Company sought to enter into the Waiver and Agreement proactively in order to obtain additional operating flexibility during the Waiver Period as the impact of COVID-19 related economic and financial developments is assessed.

 

Usage of the Revolving Credit Facility continues to be subject to a borrowing base, and the Revolving Credit Facility continues to be secured by substantially all of the assets of the Company and its consolidated subsidiaries.

 

In addition, the facility continues to contain customary representations, covenants (including restrictions on the incurrence of additional indebtedness, liens and dividends, and a requirement to maintain a certain minimum ratio of total assets, less all liabilities other than indebtedness, to indebtedness) and events of default.

 

The description above is only a summary of the material provisions of the Waiver and Agreement and does not purport to be complete and is qualified in its entirety by reference to the provisions in such amendment, a copy of which is attached hereto as Exhibit 10.1.

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On May 6, 2020, the Registrant issued a press release announcing its financial results for the quarter ended March 31, 2020.  The text of the press release is included as Exhibit 99.1 to this Form 8-K.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

 

ITEM 5.07.Submission of Matters to a Vote of Security Holders.

 

Annual Meeting:

 

On May 1, 2020, the Registrant held its 2020 annual meeting of stockholders (the “Annual Meeting”). The proposals considered at the Annual Meeting are described in detail in the Registrant’s definitive proxy statement for the Annual Meeting as filed with the Securities and Exchange Commission on March 18, 2020, as supplemented (collectively, the “Annual Proxy”). As of March 2, 2020, the record date, 68,827,754 shares of common stock were eligible to vote.  

 

First Proposal. The Company’s stockholders elected two directors of the Company (the “Class I Directors”), each of whom will serve until the 2023 Annual Meeting, or until his or her successor is duly elected and qualifies or until his or her earlier resignation, removal from office, death or incapacity. The Class I Directors were elected pursuant to the voting results set forth below:

 

 

 

Second Proposal. The Company’s stockholders approved the proposal to allow the Company to increase leverage by approving the application to the Company of a minimum asset coverage ratio of 150%, pursuant to Section 61(a)(2) of the Investment Company Act of 1940, to become effective the date after the Annual Meeting, as set forth below:

 

 

 

Third Proposal. The Company’s stockholders ratified the selection of Deloitte & Touche LLP to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2020, as set forth below:

 

 

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The Registrant issued a press release, filed herewith as Exhibit 99.1, and by this reference incorporated herein, on May 6, 2020 announcing the declaration of a quarterly distribution of $0.10 per share.  The distribution is payable on July 7, 2020 to stockholders of record as of June 1, 2020. The distributions will be paid in a combination of cash and shares of the Registrant’s common stock at the election of stockholders, with the total amount of cash to be distributed to all stockholders limited to 20% of the total distributions to be paid to all stockholders. The portion of the distributions not paid in cash will be paid in the form of newly issues shares of the Registrant’s common stock.

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

 

(d) Exhibits.

 

 

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

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EXHIBIT 10.1

 

WAIVER and AGREEMENT NO. 2 dated as of May 1, 2020 (this "Waiver") to the SECOND AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT AGREEMENT dated as of March 13, 2013 (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Credit Agreement"), among BLACKROCK CAPITAL INVESTMENT CORPORATION, a Delaware corporation (the "Borrower"); the LENDERS from time to time party thereto; CITIBANK, N.A., as Administrative Agent for the Lenders (in such capacity, the "Administrative Agent"); and BANK OF MONTREAL, CHICAGO BRANCH, as Syndication Agent.

The Borrower and the Required Lenders (such term and each other capitalized term used and not otherwise defined herein having the meaning assigned to it in the Credit Agreement) previously entered into that Waiver and Agreement dated as of March 31, 2020 ("Waiver No. 1") to the Credit Agreement. The Borrower has requested that the Lenders agree to waive compliance with or otherwise modify the covenants set forth in Section 6.07(a) and Section 6.07(b) of the Credit Agreement at all times from March 31, 2020 through and including August 10, 2020 (such period, the "Waiver Period"), and the Lenders whose signatures appear below, constituting at least the Required Lenders, are willing so to provide such waiver on the terms and subject to the conditions set forth herein. This Waiver supplements and supersedes in its entirety Waiver No. 1.

Accordingly, in consideration of the agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

A.Waiver and Agreement. Effective as of the Waiver Effective Date (as defined below):

(i)each Lender party hereto hereby waives compliance by the Borrower with the covenant set forth in Section 6.07(a) (Minimum Shareholders' Equity) of the Credit Agreement at and for the period ended March 31, 2020;

(ii)each Lender party hereto hereby agrees (x) to waive the requirement for the Borrower to comply with the covenant set forth in Section 6.07(a) (Minimum Shareholders' Equity) of the Credit Agreement at all times after March 31, 2020 during the Waiver Period, (y) that the minimum Asset Coverage Ratio required to be maintained by the Borrower on each day during the Waiver Period pursuant to Section 6.07(b) (Asset Coverage Ratio) of the Credit Agreement shall be reduced from 2.00 to 1 to 1.50 to 1 and (z) that any non-compliance with Section 6.07(a) of the Credit Agreement shall not constitute a Default at any time during the Waiver Period; provided that (I) the waiver set forth above in this clause (ii) shall automatically terminate and be of no further force and effect, and all rights of the Lenders and the Administrative Agent with respect to any breach of Section 6.07(a) or (b) of the Credit Agreement waived pursuant to this clause (ii) shall, without further action by any person, automatically be reinstated immediately following the Waiver Period as if the waiver provided above in this clause (ii) had not been granted; provided, that so long as the Asset Coverage Ratio maintained by the Borrower is not less than 1.50 to 1 at any time during the Waiver Period, failure to maintain an Asset Coverage Ratio not less than 2.00 to 1 at any time during the Waiver Period shall not constitute a Default at any time after the Waiver Period and (II) nothing contained herein shall waive or excuse

 

 

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the requirement to deliver, at the times otherwise required by the Credit Agreement, the information and reports required by the Credit Agreement, including Section 5.01 thereof, during the Waiver Period;

(iii)in connection with the waivers set forth above, the Borrower agrees notwithstanding anything to the contrary set forth in the Credit Agreement that (x) it shall not request any Borrowing or the issuance of any Letter of Credit during the Waiver Period (and the Lenders and the Issuing Bank shall not be required to honor any such request) if, after giving effect to such Borrowing or issuance, the aggregate Revolving Credit Exposure would exceed $228,000,000, and (y) during the Waiver Period, the Borrower shall not, and shall not permit any Subsidiary to, use more than $10,000,000 of the proceeds of Loans from new Borrowings or issuances of Letters of Credit, in the event the aggregate Revolving Credit Exposure exceeds $192,000,000, to make or acquire any Investment in any third party (other than Cash Equivalents) which is not a Portfolio Investment or an Affiliate thereof as of the Waiver Effective Date; and

(iv)the waivers set forth in this Section A are limited to the extent specifically set forth above and no other terms, covenants or provisions of the Loan Documents are intended to be affected hereby.

B.Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (i) this Waiver is within its corporate powers and has been duly authorized by all necessary corporate and, if required, stockholder action of the Borrower, (ii) this Waiver has been duly executed and delivered by the Borrower, (iii) each of this Waiver, and the Credit Agreement as modified hereby, constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law, (iv) as of the date hereof, no Default or Event of Default has occurred and is continuing and (v) the representations and warranties set forth in Article III of the Credit Agreement and in the other Loan Documents are true and correct in all material respects on and as of the date hereof, with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date (except, in each case, to the extent any such representation or warranty is itself qualified by materiality or reference to a Material Adverse Effect, in which case it shall be true and correct in all respects).

C.Effectiveness. This Waiver shall become effective as of the first date (the "Waiver Effective Date") on which:

(i)the Administrative Agent (or its counsel) shall have received duly executed counterparts hereof that, when taken together, bear the authorized signatures of the Borrower, each Subsidiary Guarantor and the Required Lenders; and

(ii)the Administrative Agent shall have received all amounts invoiced to the Borrower that are due and payable to it, any of its affiliates or any of the Lenders, including

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payment or reimbursement of all fees and expenses (including fees, charges and disbursements of counsel) required to be paid or reimbursed by the Borrower in connection with this Amendment.

D.Effect of Waiver. Except as expressly set forth herein, this Waiver shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower or any Subsidiary Guarantor to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. This Waiver shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. This Waiver shall constitute a Loan Document, and the representations, warranties and agreements contained herein shall, for all purposes of the Credit Agreement, be deemed to be set forth in the Credit Agreement. Each Obligor agrees that all of its obligations, liabilities and indebtedness under each Loan Document, including guarantee obligations, shall remain in full force and effect, in accordance with applicable law, on a continuous basis after giving effect to this Waiver. On and after the effectiveness of this Waiver, any reference to the Credit Agreement contained in the Loan Documents shall mean the Credit Agreement as modified hereby. This Waiver shall not extinguish any payment obligation outstanding under the Credit Agreement or discharge or release the Lien or priority of any Loan Document or any other security therefor or any guarantee thereof. Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Credit Agreement or instruments guaranteeing or securing the same, which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Waiver or any other document contemplated hereby shall be construed as a release or other discharge of any Loan Party under any Loan Document from any of its obligations and liabilities thereunder.

E.General Release. In consideration of the willingness of the Administrative Agent and the Lenders to enter into this Waiver, each of the Borrower and each Subsidiary Guarantor hereby releases and forever discharges each Lender Party (including its predecessors, successors and assigns) and its Related Parties (each of the foregoing, a "Released Lender Party"), from any and all actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected, to the extent related to the Loan Documents or the transactions described therein that relate to any act or omission by any Released Lender Party that occurred on or prior to the date hereof.

F.Counterparts. This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same contract. Delivery of an executed counterpart of a signature page of this Waiver by facsimile or other electronic imaging means shall be as effective as delivery of a manually executed counterpart hereof.

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G.Severability. Any provision of this Waiver held to be ineffective, invalid, illegal or unenforceable shall not affect the effectiveness, validity, legality and enforceability of the remaining provisions hereof; and the ineffectiveness, invalidity, illegality or unenforceability of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

H.Electronic Execution.  The words “execution,” “signature,” and words of like import in this Waiver shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Without limiting the generality of the foregoing, the parties hereto hereby (i) agree that, for all purposes, including in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, the Issuing Banks and the Borrower, electronic images of this Waiver (including with respect to any signature pages hereto) shall have the same legal effect, validity and enforceability as any paper original, and (ii) waive any argument, defense or right to contest the validity or enforceability of this Waiver based solely on the lack of paper original copies of this Waiver, including with respect to any signature pages hereto. Each of the parties hereto represents and warrants to the other parties that it has the corporate capacity and authority to execute this Waiver through electronic means and that there are no restrictions for doing so in such party’s constitutive documents.

I.Applicable Law. THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

J.Headings. The headings of this Waiver are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed by their respective authorized officers as of the day and year first above written.

BLACKROCK CAPITAL INVESTMENT CORPORATION,

BCIC-MBS, LLC,

BKC ASW BLOCKER, INC.,

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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CITIBANK, N.A., as Administrative Agent, Issuing Bank, Swingline Lender and Lender,

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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Lender signature page to the
Waiver to the
BlackRock Capital Investment Corporation Credit Agreement

 

To approve this Waiver:

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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Lender signature page to the
Waiver to the
BlackRock Capital Investment Corporation Credit Agreement

 

To approve this Waiver:

Name of Institution:

DEUTSCHE BANK AG NEW YORK BRANCH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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Lender signature page to the
Waiver to the
BlackRock Capital Investment Corporation Credit Agreement

 

To approve this Waiver:

HSBC Bank USA, N.A.

 

 

 

For institutions requiring a second signature line:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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Lender signature page to the
Waiver to the
BlackRock Capital Investment Corporation Credit Agreement

 

To approve this Waiver:

Name of Institution: Morgan Stanley Bank, N.A.

 

 

 

For institutions requiring a second signature line:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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Lender signature page to the
Waiver to the
BlackRock Capital Investment Corporation Credit Agreement

 

To approve this Waiver:

Name of Institution: STATE STREET BANK AND TRUST COMPANY

 

 

 

For institutions requiring a second signature line:

 

 

 

 

 

[Signature Page to Waiver (BlackRock Capital Investment Corporation)]

 

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EXHIBIT 99.1

 

 

BlackRock Capital Investment Corporation Reports Financial Results for the Quarter Ended March 31, 2020, Declares Quarterly Distribution of $0.10 per Share

 

New York, May 6, 2020 – BlackRock Capital Investment Corporation (NASDAQ:BKCC) (“BCIC” or the “Company,” “we,” “us” or “our”) announced today that its Board of Directors declared a quarterly distribution of $0.10 per share, payable on July 7, 2020 to stockholders of record at the close of business on June 1, 2020. The distributions will be paid in a combination of cash and shares of the Company’s common stock at the election of stockholders, with the total amount of cash to be distributed to all stockholders limited to 20% of the total distributions to be paid to all stockholders. The portion of the distributions not paid in cash will be paid in the form of newly issued shares of the Company’s common stock.

“Subsequent to and during the first quarter, our investment, operational and finance teams have remained fully operational and engaged in all aspects of the business. Our investment professionals have been in frequent contact with our portfolio companies to assess the economic and operational impact of the pandemic. Overall, the Company’s portfolio has limited or no exposure to adversely impacted sectors such as retail, energy, restaurants, leisure and hotels. We have historically operated the Company at a relatively modest leverage relative to the sector, and generally avoided investments in highly cyclical sectors,” commented James E. Keenan, Chairman and Interim CEO of the Company.

“We continued to achieve progress during the first quarter on our strategy of reducing exposure to non-core assets and deploying into a more diversified portfolio of income generating senior, secured assets. Specifically, origination and portfolio composition metrics from the beginning of 2019 to the end of first quarter 2020 (i.e. a five-quarter period) include:

 

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“We have taken the prudent step of reducing our distribution and paying a portion of distribution in stock out of an abundance of caution. Our liquidity remains adequate and unfunded commitments are small relative to the available liquidity as well as to the size of the overall portfolio. As pandemic-related economic uncertainties ease and the financial markets stabilize, our goal will be to first transition to an all cash dividend and eventually grow the dividend level.

“Overall, we believe that our conservative leverage profile and our increasingly diversified portfolio have positioned us well to weather the COVID-19 related period of macroeconomic stress. We continue to prudently manage the balance sheet with the goal of continuing to execute upon the portfolio rotation strategy over the coming quarters.”

 

Financial Highlights

 

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¹  Non-GAAP basis financial measure. See Supplemental Information on page 9.

² Calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and receivable for investments sold, plus payables for investments purchased, and (B) NAV.

 

 

Business Updates

 

 

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First Quarter Financial Updates

 

 

 

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Portfolio and Investment Activity*

 

 

*Balance sheet amounts above are as of period end

New Portfolio Companies

Incremental Investments

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Liquidity and Capital Resources

Conference Call

BlackRock Capital Investment Corporation will host a webcast/teleconference at 10:00 a.m. (Eastern Time) on Thursday, May 7, 2020, to discuss its first quarter 2020 financial results. All interested parties are welcome to participate. You can access the teleconference by dialing, from the United States, (888) 254-3590, or from outside the United States, +1(323) 994-2093, 10 minutes before 10:00 a.m. and referencing the BlackRock Capital Investment Corporation Conference Call (ID Number 6551676). A live, listen-only webcast will also be available via the Investor Relations section of www.blackrockbkcc.com.

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Both the teleconference and webcast will be available for replay by 1:00 p.m. on Thursday, May 7, 2020 and ending at 1:00 p.m. on Thursday, May 21, 2020. To access the replay of the teleconference, callers from the United States should dial (888) 203-1112 and callers from outside the United States should dial +1(719) 457-0820 and enter the Conference ID Number 6551676.

Prior to the webcast/teleconference, an investor presentation that complements the earnings conference call will be posted to BlackRock Capital Investment Corporation’s website within the Presentations section of the Investors page (http://www.blackrockbkcc.com/news-and-events/disclaimer).

About BlackRock Capital Investment Corporation

BlackRock Capital Investment Corporation is a business development company that provides debt and equity capital to middle-market companies.

The Company's investment objective is to generate both current income and capital appreciation through debt and equity investments.  The Company invests primarily in middle-market companies in the form of senior and junior secured and unsecured debt securities and loans, each of which may include an equity component, and by making direct preferred, common and other equity investments in such companies.  

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BlackRock Capital Investment Corporation

Consolidated Statements of Assets and Liabilities

 

 

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BlackRock Capital Investment Corporation

Consolidated Statements of Operations

 

 

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Supplemental Information

The Company reports its financial results on a generally accepted accounting principles (“GAAP”) basis; however, management believes that evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of the Company’s financial performance over time. The Company’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

 

After March 6, 2017, incentive management fees based on income have been calculated for each calendar quarter and are paid on a quarterly basis if certain thresholds are met. The Company records its liability for incentive management fees based on capital gains by performing a hypothetical liquidation at the end of each reporting period. The accrual of this hypothetical capital gains incentive management fee is required by GAAP, but it should be noted that a fee so calculated and accrued is not due and payable until the end of the measurement period, or every June 30. The incremental incentive management fees disclosed for a given period are not necessarily indicative of actual full year results. Changes in the economic environment, financial markets and other parameters used in determining such estimates could cause actual results to differ and such differences could be material. In addition, on March 7, 2017, BlackRock Advisors, in consultation with the Company’s Board of Directors, agreed to waive incentive fees based on income after March 6, 2017 to December 31, 2018, which was extended to June 30, 2019. BCIA had agreed to honor such waiver. For the period July 1, 2019 through March 31, 2020, BCIA has voluntarily and partially waived incentive fees. For a more detailed description of the Company’s incentive management fee, please refer to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, on file with the Securities and Exchange Commission ("SEC").

 

Computations for the periods below are derived from the Company's financial statements as follows:

 

 

Note:  The NII amounts for the three months ended March 31, 2020 are net of incentive management fees based on income and an incentive management fee waiver in the amount of $1,924,398. Additionally, please note that the NII amounts for the three months ended March 31, 2019 are net of incentive management fees based on income and a corresponding incentive management fee waiver in the amount of $2,280,836. For the periods shown, there is no difference between the GAAP and as adjusted figures; however, there may be a difference in future periods.

¹ Pre-Incentive Fee: Amounts are adjusted to remove all incentive management fees. Such fees are calculated but not necessarily due and payable at this time.

² As Adjusted: Amounts are adjusted to remove the incentive management fee expense based on gains, as required by GAAP, and to include only the incremental incentive management fee expense based on Income. Until March 6, 2017, the incremental incentive management fee was calculated based on the current quarter's incremental earnings, and without any reduction for incentive management fees paid during the prior calendar quarters. After March 6, 2017, incentive management fee expense based on income has been calculated for each calendar quarter and may be paid on a quarterly basis if certain thresholds are met.  Amounts reflect the Company's ongoing operating results and reflect the Company's financial performance over time.

 

 

Forward-looking statements

This press release, and other statements that BlackRock Capital Investment Corporation may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock Capital Investment Corporation’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and

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similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

BlackRock Capital Investment Corporation cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which may change over time. Forward-looking statements speak only as of the date they are made, and BlackRock Capital Investment Corporation assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously disclosed in BlackRock Capital Investment Corporation’s SEC reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) our future operating results; (2) our business prospects and the prospects of our portfolio companies; (3) the impact of investments that we expect to make; (4) our contractual arrangements and relationships with third parties; (5) the dependence of our future success on the general economy and its impact on the industries in which we invest; (6) the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives; (7) our expected financings and investments; (8) the adequacy of our cash resources and working capital, including our ability to obtain continued financing on favorable terms; (9) the timing of cash flows, if any, from the operations of our portfolio companies; (10) the impact of increased competition; (11) the ability of our investment advisor to locate suitable investments for us and to monitor and administer our investments; (12) potential conflicts of interest in the allocation of opportunities between us and other investment funds managed by our investment advisor or its affiliates; (13) the ability of our investment advisor to attract and retain highly talented professionals; (14) changes in law and policy accompanying the new administration and uncertainty pending any such changes; (15) increased geopolitical unrest, terrorist attacks or acts of war, which may adversely affect the general economy, domestic and local financial and capital markets, or the specific industries of our portfolio companies; (16) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets; (17) the unfavorable resolution of legal proceedings; and (18) the impact of changes to tax legislation and, generally, our tax position.

BlackRock Capital Investment Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC identifies additional factors that can affect forward-looking statements.

Available Information

BlackRock Capital Investment Corporation’s filings with the SEC, press releases, earnings releases and other financial information are available on its website at www.blackrockbkcc.com. The information contained on our website is not a part of this press release.